Availability was limited throughout the entire second quarter. Supply was further affected by a force majeure put in place at Europe’s largest BDO producer BASF on 31 May, after a fire at a precursor plant in Germany disrupted production of the feedstock acetylene.

Increases as low as €180/tonne and up to €240/tonne were implemented for third-quarter contracts, but the majority concluded with rises of €200/tonne.

Although there was little room for negotiation, buyers strongly opposed the level of targeted hikes. Although there is no disputing the tightness, consumers said the reduced cost of feedstocks propylene and methanol, and lower volume requirements through summer, should have led to only modest price increases. August demand is expected to fall by 10–40% as some plants will shut down over the summer period.

“Our demand is sliding down, probably due to high costs,” a buyer said. “I’m still in negotiation about the price increase and would like to avoid it. Unfortunately, due to the shortage of material it will be very difficult.”

Another buyer said: “Demand in China is stabilising and it’s very difficult for downstream sectors to take on the price increases. We are trying to limit our demand but we need the product. Even those who usually give some sort of discount have not this quarter, and we have settled most of our contracts up by €200/tonne.”

July offtake has been healthy, August is likely to be quiet and a typical rebound in September demand is expected.

The tightness is expected to continue for the next few months. As the industry is growing by approximately 5% per year, some expect the market to remain tight for the next two years.